Developing and Implementing

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Topic 2
Marketing Management (MAR4803) By Kanghyun Yoon

• Developing and Implementing
• Strategic Marketing Plans

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Issues To Be Discussed

• Lets consider the following issues to understand
  what the marketing management is.
• Issue 1 How to deliver the values to the
  customer?
• The important concepts for this issue are .
• Two important formulas are .
• Issue 2 What kinds of strategic planning process
  do we need to consider?
• The important concepts for this issue are .
• Issue 3 How to design a strategic marketing
  plan?
• Consider several components that a strategic
  marketing plan must possess.

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Issue 1 How to Deliver the Customer Value?
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How to Improve the Customer Value?

• Consider how the following companies enhance
  their performance?
• Examples Wal-Mart, Dell, Amazon.com, Fedex
  Express, e-Bay (online auctioneer) or Mobshop.com
  (group buying company), and so on.
• They are enhancing their customer values at the
  company level.
• An important formula is .
• Examples Dell and Nike, Sonymusic.com, BMG and
  Columbia House music club, Amazon.com and Barnes
  and Noble, Carnival, Epinions.com, and so on.
• They are improving the customer values at the
  product/brand level.
• An important formula is .
• To deliver the customer value, it is important to
  understand the following concepts.
• Value chain (system) and three generic
  competitive strategies
• Value delivery process

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The Value Chain System
S
F
W
R
Customer
M
S
R
S
R
W
Supply Chain Function
Distribution Channel Function
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Three Generic Competitive Strategies

Competitive Advantage Lower Cost
Differentiation
Differentiation
Cost Leadership
Market Scope Narrow Broad
Focus on Cost
Focus on Differentiation
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Basic Tasks of Marketing Management

• What kinds of tasks the marketing managers do
  toward building profitable long-term relationship
  with the customers?
• Task 1 Capturing Marketing Insights from the
  Changing Environment.
• The detailed tasks are .
• Task 2 Connecting with Customers.
• The detailed tasks are .
• Task 3 Developing an Effective Marketing Mix.
• The detailed tasks are .
• Task 4 Developing and Implementing Marketing
  Plans.
• The detailed tasks are .

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Value Creation and Delivery Process

• Consider how the marketing management process is
  similar to the value creation and delivery
  sequence in page 36 of the textbook.
• The Stages of Marketing Management Process
• Stage 1 Identifying marketing opportunities or
  problems.
• Key purpose Understand major environmental
  forces or trends that link to both marketing
  opportunities and threats.
• Stage 2 Developing a well-defined target market.
• Key purpose Identify different segment within
  the product market and select the most promising
  segment(s) as the target market.
• Stage 3 Designing a new product by understanding
  the customers.
• Key purpose Design a new product by
  understanding potential customers needs and
  their purchasing patterns.
• Stage 4 Developing a marketing mix.
• Key purpose Design a competitive marketing
  strategy by blending product, price, promotion,
  and place strategies.
• Stage 5 Managing the marketing efforts.
• Key purpose Measure and evaluate the
  performances of current marketing strategy.

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Issue 2 Types of Strategic Planning Process
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Three Types of Strategic Planning

• The textbook mentions three types of strategic
  planning
• Corporate and division strategic planning.
• Business strategic planning.
• Product or marketing strategic planning.
• Corporate Strategic Planning
• Defining the corporate mission ? Defining the
  business ? Assessing growth opportunities ?
  Organization and organizational culture.
• Business Strategic Planning
• Business mission ? SWOT analysis ? Goal
  formulation ? Strategy formulation ? Program
  formulation ? Implementation ? Feedback and
  control.
• Product/Marketing Strategic Planning
• Develop a marketing plan by following the
  marketing process (e.g., value creation and
  delivery process).

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Strategic Planning Process

• Companies should find their right game plan
  (e.g., strategic planning) for a profitable and
  sustainable business future.
• Example Levi Strauss Co.
• Strategic Planning involves the development of an
  overall company strategy for long-run survival
  and growth.
• It is the management process of developing and
  maintaining a strategic fit between companys
  goals and capabilities and its changing marketing
  opportunities.
• This strategic planning process involves
• Defining the Company Mission Statement of an
  organizations purpose should be market
  oriented.
• Setting Company/Business Objectives and Goals
  Supporting goals and objectives to guide the
  entire company.
• Designing the Business Portfolio Collection of
  businesses and products that make up the company.
• Planning Functional Strategies Detailed planning
  of each department to accomplish strategic
  objectives and goals.

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Designing the Business Portfolio

• Given the companys mission and objectives, two
  Issues for long-run survival and growth should be
  considered
• Does my company have a best business portfolio
  currently?
• How to develop strategies for future growth?
• Issue One Analyzing its current business
  portfolio.
• The best business portfolio is the one that best
  fits the companys strengths and weaknesses to
  business opportunities in the environment.
• The company must
• analyze its current business portfolio (e.g.,
  Strategic Business Units, SBUs),
• decide which SBUs should receive more, less, or
  no investment,
• develop growth strategies for adding new products
  or businesses to the portfolio.
• Analytical tools Boston Consulting Group (BCG)
  Growth-Share Matrix or General Electric (GE)
  Matrix.

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BCG Growth-Share Matrix

Relative Market Share High
Low

• Question Marks
• High growth, low share
• Build into Stars/ phase out
• Requires cash to hold
• market share

• Stars
• High growth share
• Profit potential
• May need heavy
• investment to grow

Market Growth Rate Low High

• Cash Cows
• Low growth, high share
• Established, successful
• SBUs
• Produces cash

• Dogs
• Low growth share
• Low profit potential

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Developing Strategies for Future Growth

• Issue Two Developing Strategies for Future
  Growth.
• The second issue for strategic planning is to
  find appropriate businesses or products that the
  company should consider in the future, e.g.,
  growth strategies.
• Two useful devices for identifying growth
  opportunities are the SWOT analysis and the
  product-market expansion grid for identifying
  three intensive growth strategies (Ansoff 1957).
• The SWOT analysis
• Consider the Market Opportunity Analysis (MOA)
• The product-market expansion grid has four
  windows
• Market Penetration increase sales to present
  customers with current products. How? Cut prices,
  increase advertising, get products into more
  stores.
• Market Development develop new markets with
  current products. How? Identify new demographic
  or geographic markets.
• Product Development offering modified or new
  products to current customers. How? New styles,
  flavors, colors, or modified products.
• Diversification new products for new markets.
  How? Start up or buy new businesses.

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Product-Market Expansion Grid
Product-Market Expansion Grid
1. Market Penetration
3. Product Development
Current Products
New Products
Current Markets
2. Market Development
4. Diversification
New Markets
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Planning Functional Strategies

• Given the results of strategic planning at the
  company level, all the functional departments
  need to work together to accomplish its strategic
  objectives.
• Marketing managers should find their own roles
  and action plans, which can be summarized into a
  strategic marketing plan that includes different
  marketing tasks in the marketing management
  process (Kotler and Armstrong 2004).
• Tasks in the Marketing Management Process
• Task 1 Identifying marketing opportunities
  and/or problems.
• Monitor major environmental forces that create
  both opportunities and threats.
• Task 2 Developing a well-defined target market.
• Identify most promising segment(s) that have
  homogeneous needs.
• Task 3 Creating the value (i.e., marketing
  offers) by understanding the customers.
• Understand the customers in terms of their needs,
  their buying patterns, and their personal
  characteristics.
• Develop a right product to satisfy the needs of
  the customers within each segment.
• Task 4 Integrating all the marketing activities
  by developing a marketing mix.
• Design a viable marketing strategy by blending 4
  Ps such as product, price, promotion, and place
  strategies.
• Task 5 Managing the marketing efforts.
• Measure and evaluate the performances of
  implemented marketing strategies.

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Factors that affect Marketing Process
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Issue 3Contents of Strategic Marketing Plan
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Components of Strategic Marketing Plan

• Executive Summary
• Situation Analysis
• Industry or category analysis
• Competitive situation analysis
• Customer analysis
• Environmental analysis
• Company and Marketing Objectives
• Company, marketing, and financial goals or
  objectives
• Marketing Strategy
• Definition of target market after segmentation,
  targeting, and positioning procedures
• Four Ps or marketing mix (product, price,
  promotion, and place strategies)
• Financial Projections and Action Programs
• Financial projections for budgets and sales
  forecasting
• Action programs
• Implementation Controls of the marketing efforts.

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Reference

• Blackwell, Roger D., Paul W. Miniard, and James
  F. Engel (2001), Consumer Behavior, 9th ed.,
  Harcourt College Publishers.
• Ferrell, O. C. and Michael D. Hartline (2008),
  Marketing Strategy, 4th ed., Thomson
  South-Western, Ohio.
• Kotler, Philip and Kevin Lane Keller (2007), A
  Framework for Marketing Management, 3rd ed.,
  Pearson Prentice-Hall, New Jersey.
• Kotler, Philip and Kevin Lane Keller (2007),
  Marketing Management, 12th ed., Pearson
  Prentice-Hall, New Jersey.
• Kotler, Philip and Gary Armstrong (2004),
  Principles of Marketing, 10th ed., Prentice Hall.
• Lehmann, Donald R. and Russell S. Winer (2005),
  Analysis for Marketing Planning, 6th ed.,
  McGraw-Hill, Boston.
• Winer, Russell S. (2007), Marketing Management,
  3rd ed., Pearson Prentice-Hall, New Jersey.
• Zikmund, William G. (2003), Essentials of
  Marketing Research , 2nd ed., Thomson
  South-Western. (see chapter 1)